RBC analyst thinks Intel should buy MediaTek to put a charge into its mobile line

RBC analyst thinks Intel should buy MediaTek to put a charge into its mobile line
RBC analyst Doug Freedman, has a solution to jump start Intel's rather moribund mobile business. Freedman suggests that Intel buy MediaTek. The analyst thinks that at this stage, Intel would be better off purchasing growth in its mobile business, instead of waiting for it to occur naturally. MediaTek has built up a reputation as the vendor for low-cost smartphone manufacturers to turn to, for application processors and baseband chips.

The RBC analyst pulled out his trusty abacus, and computed that a purchase of MediaTek by Intel, would add 16% to the latter's marketshare in the smartphone and tablet SoC market. MediaTek has been picking up share in the markets it competes in, as opposed to Intel's stagnation. Intel owns a 4% marketshare of chips used in mobile devices. MediaTek, on the other hand, doubled its share of the baseband chip market from 7.3% to 14.4% from 2007 through 2013. During that same time period, industry leader Qualcomm went from owning 33% to capturing 62% of the market.

This year, Qualcomm is expected to own 40% of the baseband processor market, followed by MediaTek's 28%. Following Spectrum Communication's 14% of the market, Intel is next with just a 5% piece of the pie. The baseband processor is the chip that controls all of the radio functions on a mobile device.


A purchase of MediaTek by Intel, would require a number of regulators to sign off on the transaction. It might be too much for Intel to make such an acquisition. Still, there is no doubt that as long as MediaTek's pricing structure remained the same following a transaction, Intel would benefit hugely from such a purchase.

source: InvestorsBusinessDaily

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19 Comments

1. joey_sfb

Posts: 6794; Member since: Mar 29, 2012

Buy! Buy! Buy!

4. Ashoaib

Posts: 3260; Member since: Nov 15, 2013

when you cant do it, buy it... policy of big crocodiles

13. Venkatramanan

Posts: 327; Member since: Aug 15, 2014

Including Google and MS

2. itsdeepak4u2000

Posts: 3718; Member since: Nov 03, 2012

But, are they ready to sell?

3. sipha

Posts: 439; Member since: May 12, 2012

Wow, thats actualy a brilliant idea..(for intel)

5. GreekGeek

Posts: 1276; Member since: Mar 22, 2014

Why sell a profitable business? Mediatek is nowhere near going downhill at this point.

7. TheMan

Posts: 494; Member since: Sep 21, 2012

That's often when it's worth the most.

6. techspace

Posts: 1037; Member since: Sep 03, 2012

Whenever I come to PA from my nexus 5, I get a popup ad which which asks me to download c launcher and 'OK' is the only option provided, if I hit the back button I get out of the website....i never get such popup ads on my idevices....I am complaining about it because I don't want to install adblock plus( that would make PA lose money and it is a battery hog)

8. Tritinum

Posts: 471; Member since: May 06, 2014

Change your browser.

10. techspace

Posts: 1037; Member since: Sep 03, 2012

The popup ad has nothing to do with the browser.

9. luis.d

Posts: 354; Member since: Dec 04, 2013

Yeah, and MediaTek will buy Snapchat :)

11. SemiFinal

Posts: 117; Member since: Jul 26, 2014

Maybe MediaTek can incorporate some Intel technology in their chips if this happens

12. Lt.Green

Posts: 397; Member since: Mar 13, 2014

MediaTek Soc with Hyper Threading? Qualcomm better watch out.

14. TylerGrunter

Posts: 1544; Member since: Feb 16, 2012

It's a very good idea (for intel) as Mediatek is not that high priced they can't do it. But I doubt Chineese/Taiwaneese regulators would agree on the adquisition, as many of their own companies depend on the fair prices that the competition that having multiple companies provide.

15. brrunopt

Posts: 742; Member since: Aug 15, 2013

Not worth it... What would Intel gain ? bragging rights for having 28% of the market while making barely any money ? Not to mention they would be competing against themselves (Atom line) ..

16. Suo.Eno

Posts: 556; Member since: Feb 17, 2013

If Intel's gonna shortcut it, it's these guys that should have some semblance of candicacy not MediaTek:- http://newsroom.intel.com/community/intel_newsroom/blog/2014/05/27/intel-enters-into-strategic-agreement-with-rockchip-to-accelerate-expand-portfolio-of-intel-based-solutions-for-tablets Yeah MediaTek's way bigger and more forward moving but like the rest of the guys here I think Intel can still do more with their Atom line.

17. JakeLee

Posts: 1021; Member since: Nov 02, 2013

Intel shall brcome ARM licensee? Apple launching Android phones would sound more realistic. Intel doesn't simply want to sell chips, but their own x86 chips. It's about hegemony.

19. Augustine

Posts: 1043; Member since: Sep 28, 2013

The day that Intel makes anything other than x86 in volume is going to spell its doom, its transformation into yet another ARM vendor, albeit a very effective one. Can Intel then survive without being a virtually monopolistic bully behemoth? I don't think so; rather, going the way of Sun would be more likely.

18. JakeLee

Posts: 1021; Member since: Nov 02, 2013

In addition, if a fabless SoC vendor wanted Intel to fab their chips, they'd have to completely redesign their chips from gate first to gate last. (or the other way around) That would be a tremendous amount of work with lots of trial-and-errors which hardly anyone can afford. That analyst is certainly clueless.

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